The Anti-Monopoly Law (AML) of the People's Republic of China took effect on 1 August, 2008. The enactment of the AML is of great importance to protecting the country’s fair competition, enhancing economic efficiency, safeguarding the interest of consumers and the society as a whole, and promoting the healthy development of China’s socialist market economy. As an advisor to the AML review process, the author shares his views and understanding of the law in this article, and looks into the key features, distinctive provisions and major limitations of the AML.
The article outlines two key features of the AML. First, due to the lack of a strong competition culture and enforcement experience in China, the AML was legislated with rather general and broad-brush provisions, which was in fact a practical option for China. Second, the AML was legislated with full consideration to the country’s economic conditions at the time; meanwhile, it also drew lesson from international experiences and best practices to the largest extent possible.
The author then points out three distinctive provisions of the AML. First, Article 8 of the AML lays the principle of forbidding any administrative monopoly caused by government and public bodies, while Chapter 5 specify the details and relating legal consequences. Second, there is a specific provision (i.e. Article 7) in the AML addressing to two types of industries: (1) those are critical for the country’s economy and national security and in which state-owned enterprises enjoy dominant positions (2) those in which certain business operators are conferred by law monopoly right. The third distinctive provision is in relation to the enforcement regime in which a number of different government bodies and agencies at both the central and the provincial level are empowered to enforce the AML under the supervision of the Anti-Monopoly Commission of the State Council.
The article also highlights and discusses ten key rules of the AML, including (1) Article 14- on resale price maintenance and minimum resale price maintenance; (2) Article 45- on undertaking’s commitment; (3) Article 46(2)- on leniency programmes; (4) Article 21- on compulsory ex-ante notification system for mergers and acquisitions; (5) Article 51- on administrative monopoly; (6) Article 55- on the abuse of intellectual property rights; (7) Article 11, Article 16 and Article 46(3)- on trade associations; (8) Article 56- on exemption; (9) Article 2- on the extraterritoriality; (10) Article 31- on national security and the review of mergers and acquisitions involving foreign investment.
At last, the author points out two major limitations of the AML. First, the AML fails to clarify the relationship between the AML and other sectorial regulations, and it is also unclear whether antimonopoly agencies or sectorial regulators shall enforce the law should issues arise. Second, given the absence of criminal sanction and individual liability under the AML, the law’s deterrent effect is questionable.